Creating a personal my Social Security account is a key step to managing your Social Security benefits online, but a lot of Americans worry about potential impacts on their credit. Good news is self-evident: creating a my Social Security account won’t damage your credit score or adversely affect your creditworthiness.
No impact on your credit score
The Social Security Administration (SSA) formally guarantees that creating a my Social Security account won’t affect your credit score. When you create your account, the SSA employs an Identity Services Provider, currently Experian, to confirm your identity for a soft inquiry or soft credit check. It is a whole different kind of inquiry than the hard inquiries that are performed when you apply for credit cards, mortgages, or loans.
Soft inquiries do not affect credit scores because they are not associated with a specific new credit application. Credit-scoring models recognize that soft inquiries are identity checks or background checks and not actual credit-seeking activity. Whether you are viewing your own credit report, undergoing a background check, or verifying your identity for government entitlements, these soft inquiries do not threaten your financial well-being.
What appears on your credit report
Even though the Social Security Administration soft inquiry will not negatively impact your credit score, you may see a notation on your Experian credit report stating that Social Security ordered a verification. The notation will show the Social Security Administration as the requestor and the date requested. But the notation appears only in the copy of your credit profile that you see as a consumer.
Importantly, soft inquiries are not apparent when lenders review your credit report to see if they should lend to you. Banks, credit card companies, and other organizations that check your creditworthiness will not be able to locate the soft inquiry on opening your my Social Security account. As a result, opening your Social Security account will never haunt you when you take out a mortgage, car loan, credit card, or other line of credit.
The soft inquiry entry will typically remain on your Experian credit report for a few 25 months before it is automatically removed. During the intervening months, it is merely a record for your own purposes and does not impact credit decisions. The inquiry is not supposed to appear on your credit reports with the other two large credit bureaus, Equifax and TransUnion.
Understanding hard inquiries versus soft inquiries
In order to better grasp why opening my Social Security account is not credit risk, it is useful to understand the difference between soft and hard credit inquiries. A hard inquiry occurs when you apply for credit and a lender requires your full credit report in order to review your application. Instances include applying for a mortgage, car loan, personal loan, or new credit card.
Hard inquiries temporarily lower your credit score by five to ten points and can remain on your credit report for up to two years, but their impact typically disappears after 12 months. Multiple hard inquiries over a brief time can signal financial distress to lenders and result in higher rates or denial of credit.
Conversely, soft inquiries occur when a person pulls your credit for non-loan purposes. Typical examples of soft inquiries are checking your own credit report, getting prequalification or pre-approval statements from credit card issuers, going through employment background checks, and identifying yourself for government services such as Social Security. None of these actions influence your credit scores.
The identity verification process
When you create a my Social Security account, you must choose between two credential service providers: Login.gov or ID.me. Both websites meet the U.S. government’s online identity verification and authentication requirements. The SSA uses these services to secure that you are you and not someone else and to keep your sensitive personal information from being accessed fraudulently.
During the process of verifying identity, you will be asked to provide a valid email address, create a strong password, enable two-step verification, and provide personal data which should match records in evidence. Login.gov and ID.me may ask you to upload images of government-issued documents such as a driver’s license, state ID card, or passport and maybe even a selfie to confirm you are the owner of the document.
The verification process also checks your Social Security number with public and proprietary records. This is when Experian, as the Identity Services Provider for the SSA, uses information from your credit report to help verify your identity. However, this verification uses only a soft inquiry process that has no negative impact on your credit score.
Requirements for creating an account
In order to successfully create a my Social Security account, you must meet some simple prerequisites. You must be 18 years and older and possess a Social Security number[11][14]. You also need an active email address and, for most of the users, a mailing address in the United States, although those whose addresses are outside of the United States can now use most of the Social Security online services with an ID.me credential.
If you already have a pre-existing Login.gov or ID.me account from using other government services, you do not need to authenticate yourself again with the SSA. You can simply log in using the current credential and directly see your own my Social Security account.
Benefits of creating your account
Despite some preliminary apprehension about credit effects, creating a my Social Security account has considerable value in allaying any hesitation. Your account provides straightforward online access to view your Social Security earnings record, check survivor benefit estimates for survivor benefits, disability benefits, and retirement benefits, and print substitute Social Security cards. You also can modify direct deposit details, order benefit verification letters, and manage your Medicare information.
The web application is a useful money planning tool, allowing you to verify your earnings recorded to your Social Security account and receive customized projections of your future benefits. You can make retirement and personal financial planning choices with confidence with this information at your fingertips.
